Bankruptcy Dynamics of PT Sri Rejeki Isman Tbk (Sritex): Legal Analysis, Causal Factors, and Implications for Creditors and Indonesia’s Textile Industry

Abstract

This article analyses the insolvency trajectory of PT Sri Rejeki Isman Tbk (Sritex) after the cancellation of a court-homologated PKPU composition and the affirmation of bankruptcy status at the cassation level. The research uses a doctrinal legal method, complemented by a case-study reconstruction grounded in publicly accessible court decisions and official corporate disclosures. The study clarifies (i) the normative conditions and procedural pathway for composition cancellation under Law No. 37 of 2004; (ii) the distributional consequences for secured (separatist), preferred, and concurrent creditors once bankruptcy is declared; and (iii) the wider industrial implications for Indonesia’s textile and garment ecosystem, including labor vulnerability and supply-chain contagion. The article argues that composition cancellation cases expose structural weaknesses in feasibility testing and post-homologation monitoring: compositions may be approved on optimistic assumptions without sufficiently enforceable transparency and early-warning mechanisms. To strengthen legal certainty and value preservation, the paper proposes reforms at three levels: stricter feasibility scrutiny at the composition stage; mandatory, auditable post-homologation reporting with meaningful creditor committee participation; and clearer governance protocols for going-concern strategies and labor-claim coordination in large, labor-intensive bankruptcies.